Despite sanctions, Iran shows no change in nuclear ambitions

By Oren Dorell, USA TODAY

Iran is finding ways around international sanctions meant to pressure its leaders to abandon its nuclear aspirations, even as evidence mounts that sanctions are hurting the Iranian people, Iran analysts say.

By Burhan Ozbilici, AP

Iran's Chief Nuclear Negotiator Saeed Jalili speaks to The Associated Press after day-long talks with six world powers in Istanbul, Turkey, on April 14.

Iran's Chief Nuclear Negotiator Saeed Jalili speaks to The Associated Press after day-long talks with six world powers in Istanbul, Turkey, on April 14.

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"It's definitely having an effect," says Kenneth Katzman a Middle East specialist at the Congressional Research Service. "The question is: Is it having enough of an effect," to make Iran change course.

Other experts say that despite high inflation and decreased Iranian oil exports, sanctions have not produced the desired impact on Iran's nuclear program, which the United States says is aimed at building a nuclear weapon.

"There are no indications that these sanctions are forcing leaders to rethink their nuclear program or rolling back their nuclear activities," says Maseh Zarif, Iran team leader for the American Enterprise Institute's Critical Threats Project.

The only thing that will cause a change in the regime's behavior, "is a threat to regime survival," Zarif says.

Iran says it has a right to pursue a nuclear program, which it says is for research and energy production. Saeed Jalili, the chief Iranian nuclear negotiator, has said it is "un-Islamic" to have a nuclear weapon.

Iranian leaders have acknowledged the impact of sanctions, with Iranian president Mahmoud Ahmadinejad saying in November that banks cannot make international transactions. Iranian lawmaker Ahmad Tavakoli said this week that the national currency devalued 60% in 40 days, making it harder for goods produced in Iran to compete with imports, according Iranian press reports.

Sanctions administered by the U.S. Treasury prohibit U.S. companies from trade and financial dealings with Iran, and the European Union restricts trade, financial services and technology business with Iran. The sanctions impede the ability of any nation to pay Iran for its oil with U.S. dollars, which is the currency used for much of the global petroleum trade.

State Department spokeswoman Victoria Nuland said Wednesday that recent talks with Iran in Turkey and plans for more talks next month in Baghdad are "a direct result" of "the international pressure that we've been able to bring to bear — more sanctions than we've ever been able to muster against Iran."

The European Union, which bought 20% of Iran's oil before January, agreed to ban Iranian oil imports by July 1. As the economic noose tightens, Iran and its merchants are doing what they can to survive.

Meanwhile, India and China are working around the sanctions. Instead of accepting dollars for its oil, Iran, the world's fourth-largest oil producer, is trading crude oil for cars, dishwashers, refrigerators, gold, clothes, Chinese cosmetics and Indian wheat, sugar and cooking oil, Katzman says.

Sanctions have also forced European insurance companies to deny insurance to port operators dealing with Iran. As a result, Iranian oil tankers have been turned away at foreign ports, and fewer shipping companies are carrying Iranian oil, Katzman says.

Iran is buying 12 new super-tankers from China to carry its oil, according to Reuters news service. And Iran is also self-insuring its ships. Even so, Katzman says, it's not clear how many port operators will accept Iranian insurance.

With major Indian, Japanese and South Korean car manufacturers pulling out of the Iranian market because of sanctions, "it's a major slowdown," Katzman says.

Zarif says sanctions might have worked better if they'd been tried 10 years ago, when Iran was just starting its uranium-enrichment program, but now, "it's not clear these sanctions will have a forcing effect."

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